Micron's Inventory Needs To Drop First

Since late 2018, shares of Micron Technology (NASDAQ:MU) has increased more than 45%. What is amazing is that the market appears to shed off the bad news of continuously sliding DRAM/NAND memory price and resulting downward revisions of forward revenues (Point A in Figure 1A). Probably, the only remaining positive information that the market has used to support the stock price is the Micron's CEO Sanjay Mehrotra's uplifting guidance during the 1Q earnings call:

"But, as we have said that second half of this calendar year, we do expect that bit growth in DRAM to continue on a quarter-over-quarter basis, both sequentially as well as on a year-over-year basis. And that is already, we are guiding to bit growth in DRAM for our FQ3, and that should continue in FQ4 and for the rest of the year as well. And in NAND, there is of course the seasonality in the second half of the calendar year. And of course, we expect effect of elasticity also to help improve the demand."

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